Five Key Benefits of Data Analytics for Small Businesses

Kade Brewster • Mar 13, 2023

Data Analytics provide critical tools to help your small business grow

Small businesses are the backbone of our economy, making up over 99% of all businesses in the United States. These businesses face a unique set of challenges, such as limited resources and competition from larger companies. To stay competitive and grow, small businesses need to make calculated decisions in a timely manner. This is where data analytics comes in.


Data analytics has become an essential tool for businesses of all sizes, enabling them to make informed decisions that can drive growth and success. For small businesses in particular, data analytics can provide a range of benefits to help them stay ahead of their competition.


In this article, we will explore five key benefits of data analytics for small businesses. From a better understanding of customers to improving operational efficiency and increasing revenue, data analytics can help small businesses make data-driven decisions informed by accurate and up-to-date information. We will provide examples within each benefit to show how small businesses can use data analytics to gain a competitive advantage and achieve long-term success.


Data Analytics Allows for Better Understanding of Customers

A better understanding of a business’s customers is critical to success. By analyzing data such as demographics, purchase history, and website behavior, a company can begin to paint a clearer picture of their audience. Once that data is synthesized, this information can help a business create customer personas to better segment their target audience. Businesses can identify customer preferences, behavior patterns, and needs, all of which can inform their product development, marketing, and sales strategies. For example, a small online retailer may use data analytics to segment their customers by age and gender, analyze their purchase history, and identify which products are most popular among different customer segments. This can help the retailer tailor their marketing and promotions accordingly, leading to increased customer engagement and sales. Another key element of data analytics for retailers is increasing abandoned cart conversions. By understanding where your customers abandon their carts, retailers can understand what factors like additional taxes or creating an account might prevent a better conversion rate. 


Data Improves Operational Efficiency to Save Money

Data analytics can help small businesses improve their operational efficiency by identifying areas where they can reduce costs and increase productivity. By analyzing data on production processes, equipment usage, and inventory management, small businesses can optimize their operations and reduce waste. Pairing a data analyst with someone trained in Six Sigma and Lean Methodologies can create an even greater impact for business. For example, a small manufacturing company may use data analytics to identify bottlenecks in their production process, collect real-time pricing data, and optimize the flow of materials and equipment. They can then leverage Lean and Six Sigma Methodologies to help them reduce waste, keep material costs low, improve productivity, and ultimately increase their profitability. 


Competitive Marketing Advantages are Established

Providing insights into market trends, competitor behavior, and industry developments are just a few ways that data analytics can give small businesses the competitive advantage. By monitoring these factors, small businesses can make data-driven decisions that keep them ahead of their competition. For example, a restaurant may use analytics to track customer reviews and social media activity to identify what their competitors are doing well and where they can improve. The ability to react in near real-time to complaints or concerns from customers helps businesses not only prevent long-term customer loss, but also can engage a customer and win them to the side of advocacy for that business. Additionally, restaurants can also leverage their POS system to identify food and drink pairings or the most commonly ordered items. This can help the restaurant tailor their menu, pricing, and promotions to better meet the needs of their customers and outcompete their rivals.


Data Analytics Creates Better Decision-Making

Up-to-date analytics can provide small businesses with the opportunity to make better decisions quickly. Oftentimes business leaders are making decisions that are based on assumptions rather than real data, which can allow competitors to take advantage and win market share. By analyzing data from multiple sources, small businesses can identify patterns and trends that can inform their decision-making. For example, a small software company may use data analytics to identify which features of their product are most popular among users and prioritize optimizing these features in future development. A/B testing through analytics is a great way for companies to see and understand data from customers and is an incredibly popular method with companies like Apple and Facebook. This can help the company create experiences and products that better meet the needs of their customers, while ultimately increasing their sales and revenue.


Increase Your Company’s Revenue 

Identifying new opportunities for growth and optimization through data can lead directly to an increase in your revenue. To understand how, let’s look at small banks and credit unions. By analyzing data on customer behavior, transaction history, and market trends, banks and credit unions can identify new markets, optimize pricing strategies, and improve their products and services. For example, a small credit union may use data analytics to piece together data from disparate systems and better understand their customer. This will allow them to more effectively cross-sell additional products and increase wallet share amongst current customers. The result? The credit union increases their revenue and profitability while offering their members financial products at a competitive price. Additionally, data analytics can help banks and credit unions identify potential fraud and manage risks, further protecting their revenue streams.

 

In conclusion, data analytics has become an essential tool for small businesses to make data-driven decisions that can help them grow and stay ahead of their competition. By leveraging data analytics tools and techniques, small businesses can gain a deeper understanding of their customers, streamline their operations, identify new opportunities for growth and optimization, and make informed decisions about product development, pricing strategies, and marketing efforts.


As the importance of data analytics continues to grow, small businesses are at a critical crossroads. Either an organization can begin using data to build competitive advantages, or they can risk lagging behind competitors. However, it is important to note that implementing data analytics can be complex and costly. Small businesses should seek out the guidance of experts who can help them make sure they're maximizing the impact of the resources they can invest into analytics. Small businesses should seek out the guidance of data and consulting experts who can help them implement the right tools and strategies to achieve their goals.


To succeed as a small business, your team needs to be able to execute day after day. Success comes down to a series of decisions made on a daily, even hourly, basis. In order to inform that decision-making process, successful businesses turn to data analytics to ensure they have the best information available. By having the tools to inform and optimize, small businesses can create their own advantages and compete with larger companies.


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The Crucial Role of Measurable KPIs in Project Management

By Tim Lee • 22 Dec, 2023
For businesses that want to scale and grow, the ability to measure and evaluate progress is vital for achieving an organization’s goals and ensuring its sustained growth. In this blog, we'll delve into the importance of having measurable Key Performance Indicators (KPIs) with tangible outcomes, and highlight the repercussions that neglecting this fundamental practice can have on your team, your company, and your overall success. The Pitfalls of Unmeasurable Outcomes Imagine navigating a ship without a compass – the result is a directionless journey fraught with uncertainties, during which no one knows if they’re on the right track or in what ways they could course-correct or improve. This is the reality, whether it’s obvious to them or not, that all companies lacking measurable outcomes and clear goals face the risk of. Some are better at ‘faking it until they make it’ than others, but sooner or later the unpreparedness and lack of proactivity that mark these groups will make itself known. Without a compass to guide them, organizations may struggle to understand their performance, leading to wasted resources, missed opportunities, and the potential for project failure. The Costly Consequences of Unorganized Goals Consider Company X, which embarked on a marketing campaign without establishing specific, measurable objectives. Without clear metrics, the team found it challenging to assess the campaign's progress and success. While they had no insight into their success, valuable time and budgets were squandered and the company failed to capitalize on potential market opportunities that they otherwise could have had they been more organized and prepared. This scenario illustrates the critical need for measurable outcomes to guide decision-making and optimize resource allocation. The Power of Measuring Results On the flip side, organizations that embrace measurable outcomes and lean into the valuable data they can derive from them are equipped to make informed decisions, adapt to changing circumstances, and thrive in the competitive business landscape. Take Company Y as an example, which implemented a project management system that tracked and measured key performance indicators at every stage within a major year-long project. This project required several teams to work interdependently, which meant many moving parts. Knowing this, Company Y created several workflows that allowed for progress tracking, data collection, and more efficient collaboration. As a result, they could analyze data in real-time, identify bottlenecks, and make timely adjustments. They knew where they were, what was working, and what they needed to do to get better. This proactive approach not only enhanced project efficiency but also enabled the company to make data-driven decisions that positively impacted its bottom line. Key Performance Indicators for Small Businesses Now that we've established the importance of measurable outcomes, let's explore some Key Performance Indicators that all small businesses should track to ensure improvement and growth. Customer Acquisition Cost (CAC): Knowing how much it costs to acquire a new customer helps businesses allocate marketing budgets more effectively.  Customer Lifetime Value (CLV): Understanding the long-term value of a customer enables businesses to prioritize customer retention strategies. Project Timeline Adherence: Tracking project timelines ensures timely completion, helping small businesses build a reputation for reliability. Employee Productivity: Monitoring individual and team productivity ensures optimal resource utilization and identifies areas for improvement. This could include Revenue per Employee, Profit per Employee, or a number of other metrics. Return on Investment (ROI): Calculating the ROI of various initiatives helps businesses focus on activities that generate the most significant returns. Tracking KPIs can be a daunting task, especially for small businesses navigating the complexities of project management. Brewster Consulting encourages businesses to prioritize measurable outcomes and clear KPIs, while helping them create tailored solutions to streamline the tracking, analysis, and solution-creating process. By doing this, companies can steer their projects with precision, avoid the pitfalls of unorganized goals, and position themselves for sustainable success and growth over time.

The 5 Keys to Building a Project Management Office: A Guide

By Tim Lee • 22 Dec, 2023
Project Management - we’ve heard this broad term used by almost every company, especially in the last few years; but what does it actually mean, and better yet, how can it actually be put into practice to help your company succeed? At Brewster Consulting, we partner with businesses of all sizes in navigating the complex terrain of project management. In this blog, we will cover a few basics that we feel are pivotal attributes that mark a successful Project Management Office (PMO).  1) A Robust Project Intake Process At the head of any successful PMO lies a robust project intake process. This process acts as the gateway for project initiation, ensuring that only projects aligned with the company's strategic objectives and overall mission gain approval. Brewster Consulting advocates for an objective and repeatable intake process, one that stands the test of time and promotes consistency in decision-making. A repeatable process with a well-defined sequence of steps that can be easily replicated not only saves time but also ensures that every project, regardless of its scale or complexity, undergoes the same scrutiny and evaluation. Meanwhile, objectivity guards against subjective biases that may cloud judgment or cause a team to become unfocused. By helping them to establish clear criteria for project evaluation, Brewster Consulting empowers organizations to make informed decisions based on project merit, aligning projects with the overarching goals of the company. 2) Objective Prioritization Once projects are in the pipeline, the next crucial step is prioritization. Brewster Consulting advocates for an objective approach to prioritization, focusing on criteria such as strategic alignment, resource availability, and potential impact on the organization. This ensures that projects that are deemed to be the most impactful are tackled first and are given the priority and resources that could have gone to other projects had the prioritization process been less streamlined or less organized. Objective prioritization prevents the arbitrary ranking of projects and promotes a data-driven, decision-making culture within the organization. Brewster Consulting provides the tools and methodologies needed to objectively assess and rank projects, allowing companies to allocate resources efficiently while also maximizing their return on investment. 3) Standardized Method of Implementation When most people think about Project Management and a PMO, Implementation is immediately where they go. Brewster Consulting emphasizes the importance of a standardized method of implementation to streamline project execution according to PMI best-practices. By establishing standardized processes, companies can reduce the risk of errors, enhance collaboration, and accelerate project delivery. Brewster Consulting works with organizations to develop customized project management methodologies tailored to their unique needs and resources. This ensures that teams across the organization are on the same page, adhering to best practices and driving projects to successful completion. For small businesses, this aspect is especially helpful to ensure that resources are being utilized as efficiently and effectively as possible. 4) Nimble Change Management Change is inevitable in the realm of project management, meaning that effective change management is essential for smooth project delivery. This involves not only anticipating and managing resistance, but also proactively communicating changes to all throughout the project lifecycle. Brewster Consulting collaborates with organizations to develop comprehensive communication plans that address the needs of stakeholders at every stage of the project. By fostering a culture of transparency and open communication - pillars of effective Project Management - organizations can navigate change with confidence, ensuring that projects stay on course despite the inevitable twists and turns. Effective Change Management needs to be creative and exciting for ownership and buy-in to take place. Brewster Consulting employs creative tactics for Change Management including round table discussions, open office hours, and other means to ensure the change is adopted and supported. Emails and weekly project updates are good, but they’re not going to get you the buy-in you need long-term. You need to get creative. 5) Accurate Results Measurement Results measurement may be the most vital piece of a PMO. Establishing strong and consistent KPIs, navigating how best to analyze the data from projects, and then learning from and acting on said data is paramount to an organization’s success on any project. For companies both small and large who want to make the most of their resources, complete projects efficiently and successfully, and develop workflows that allow for constant improvement, results measurement cannot be ignored. This element of the PMO journey encompasses all of the other components discussed above - Brewer Consulting is passionate about coming alongside businesses and helping them continuously refine their project management processes. Building a Project Management Office is an outstanding strategic investment in the future of any organization. Brewster Consulting is passionate about guiding businesses through the intricacies of project management, providing the framework above to aid in creating and maintaining a standard of excellence for your process. Click here to see Brewster Consulting’s COO, Tim Lee, talk about these five keys.

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